Republic of the Philippines REGIONAL TRIAL COURT 10th Judicial Region Branch 2 Hall of Justice, Butuan City

AQUASTEEL CORPORATION, As represented by Daisy EscalaAsunto, Plaintiff, versus -

Civil Case No. 5704

FOR: Specific Performance, Damages and Attorneys Fees

SPOUSES FELOMINA C. MORALES & ERNESTO MORALES, Defendants. X ---------------------------------------/ PLAINTIFFS REPLY TO DEFENDANTS OPPOSITION (TO PLAINTIFFS MOTION FOR LEAVE TO AMEND FORMAL OFFER OF EXHIBITS)

COMES NOW Plaintiff, by counsel, to the Honorable Court respectfully state In an ORDER dated January 28, 2014, the court gave defendants time to submit their opposition to plaintiffs motion, and gave plaintiff until February 26, 2014 within which to submit a response. Thereafter, the said motion is deemed submitted for resolution.

Plaintiffs counsel received defendants Opposition and submits this pleading in court to consolidate all issues for the courts resolution of the current motion. ARGUMENTS I. Plaintiffs Motion Is Not Violative of Defendants Right to Due Process.

1. Defendants vehemently oppose plaintiffs motion as violative of their right to due process, both substantial and procedural, not to mention offensive to the rule on fair play. Plaintiff disagrees. What could be more in tune with fair play than laying all your cards on the table? The granting of plaintiffs moti on will not prejudice defendants rights because (a) all admitted documentary or testimonial evidence will be made available to them for inspection and objection; (b) a grant of leave to recall witnesses does not mean defendants lose their right to crossexamination; and (c) the case and its issues can be disposed based on merits rather than technicalities if the court is afforded the opportunity to examine all evidence relevant to the case. If the court sees it fit, new evidence to be presented may be examined even under conditional admissibility. Plaintiff fails to see how her motion would be offensive to defendants clearly safeguarded rights. On the other hand, a denial of plaintiffs motion would greatly prejudice her case because a procedural technicality would prevent a substantial amount of evidence from ever seeing light. Again, the disposal of the case would be primarily by technicalities rather than merit. The operation was a success, but the patient died. What such a procedure is to medicine, the cases disposal would be to litigation. To put it more accurately, the case would end (after more than seven years) but justice was not administered. 1.1. A peculiar objection in defendants Opposition is the alleged plaintiffs

quoting and heavy reliance on defendants Judicial Affidavit (November 24, 2013) and statements in defendants Objections/Comments to Formal Offer of Exhibits (August 27, 2013). Defendants assail the motion because the new counsel for the plaintiff subconsciously took advantage of the contents of

the legal documents of the opposing party/defendants that were in her possession. Plaintiffs counsel assures defendants that the use by quoting and reference of statements in some of their legal documents (Pre-trial Briefs, Answer, Judicial Affidavit, Comments) was undertaken consciously. This advantage which plaintiff undertook apparently to defendants consternation is made possible because (1) Judicial Affidavits, under A.M. No. 12-8-8 SC a.k.a. The Judicial Affidavit Rule (extended until December 2014), are submitted in lieu of direct testimonies. The statements therein are treated as the partys direct testimony and are all court -made statements. These are, as a matter of course, submitted to court and opposing party is required to be served with copies of it, which is why they are in plaintiffs possession, as well as the courts and yes, even defendants. That is also why there can be no objection if plaintiffs counsel humbly quotes and relies on defendants statements in court (except if defendants mean to argue that they are not bound by their own statements in court). 1.2. Defendant further seeks the disallowance of plaintiffs motion

because allegedly, Plaintiffs reliance on the provisions of Sec. 5 of Rule 10 is TOTALLY MISPLACED because what the rule allows is an amendment of a pleading x x x and a Formal Offer of Exhibits is not a pleading. Plaintiff disagrees with this far too narrow and restrictive interpretation of the discretion given to the courts by Rule 10. The power to grant leave to amend pleadings are provided expressly by said Rule thus it states in part the court may allow the pleadings to be amended and shall do so with liberality if the presentation of the merits of the action and the ends of substantial justice

will be subserved thereby. The court may grant a continuance to enable the amendment to be made. [see Rule 10 Sec. 5 last paragraph] [emphasis supplied] Clearly all petitions, motions, and other pleas addressed to the courts discretion are covered by the term pleading. A Supplemental Offer of Exhibits, for example, can be allowed by the court to be submitted if only for the presentation of the merits and to serve substantial justice . It is an established rule that pleadings should be construed liberally in order that the litigants may have ample opportunity to prove their respective claims and that a possible denial of substantial justice due to legal technicalities may be avoided (Philippine Veterans Bank v. Court of Appeals, G.R. 81957, May 23, 1989, 173 SCRA 544). It would be ironic that a strict technical meaning be given to a Rule that is based on liberality; a rule the purpose of which states that so that actual merits of the controversy may speedily be determined, without regard to technicalities, and in the most expeditious and inexpensive manner. [Rule 10, Sec. 1 Emphasis Supplied] 1.3. Defendants then assail the motion saying it must be DENIED FOR

FAILURE TO INDICATE BY APPROPRIATE MARKS THE AMENDMENTS SOUGHT TO BE ADMITTED x x x and that the Additional Exhibits includes documents that have never been marked and identified *3.3 and 3.4 in defendants Opposition]. The Plaintiff is persuaded, therefore, that defendants argument is virtually correct. Since it is not, however, actually correct, Plaintiff must respectfully, and indeed diffidently, disagree.

Plaintiff reiterates that these pieces of evidence (the purported new additional exhibits) were made available, even before trial proper, to opposing party. These documents are not new to the opposing party and were identified as early as during the submission of the complaint and were made to be available to a proposed Panel of Commissioners. All those were laid on the table or incorporated in the records of the case even before the trial started. Further, Section 34 of Rule 132 (the court shall consider no evidence which has not been formally offered.) IS NOT ABSOLUTE, AND IN FACT HAS RECOGNIZED EXCEPTIONS. following: (a) Under the Rule on Summary Procedure, where no full-blown trial is held in the interest of speedy administration of justice; (b) In summary judgments under Rule 35 where the judge based his decisions on the pleadings, depositions, admissions, affidavits and documents filed with the court; (c) Documents whose contents are taken judicial notice of by the court; [Nota Bene: i.e. The MOA between Defendants and 3 rd Party SUDECOR is a perfect example of a document that can be taken judicial notice of by the court because both parties admits its existence and genuineness.] (d) Documents whose contents are judicially admitted; [NB: same as above] The exceptions to the general rule are the

(e) Object evidence which could not be formally offered because they have disappeared or have become lost after they have been marked, identified and testified on and described in the record and became subject of cross-examination of the witness who testified on them during the trial and; (f) Marked exhibits not formally offered may be admitted provided it complies with the following requisites: [a] must be duly identified by testimony duly recorded ;[LALAB PLEASE CHECK THE JUDICIAL AFFIDAVITS OF MAMA AND ATE EMY IF NA-MENTION NILA ANG UBAN DOCUMENTS e.g.

ledgers/receipts, etc.] [b] must have been incorporated in the records of the case. (Ramos v. Dizon, G.R. No. 137247, August 6, 2006) 1.4 Further still, defendants conveniently forgets to address in its Opposition the argument in plaintiffs Motion about judicial admissions. The rule is that judicial admissions do not need to be formally offered in evidence. Extrajudicial admissions need to be offered formally to be admitted. That

Defendants entered into a MOA with SUDECOR is an ADMITTED FACT. (See par. 1 of Defendants Pretrial Brief). Admissions in the pretrial briefs are judicial admissions and well-settled is the rule that an admission made by a party during the course of the proceeding does not require proof. There is therefore, no need for Plaintiff to even present the MOA of defendant and SUDECOR. The summary of admitted facts under the Pretrial briefs under

Sec. 6(b) of Rule 18 binds the party making the statements . (Republic v. Sarabia 468 SCRA 142) Admissions of parties during pre-trial embodied in the pre-trial order of the court are conclusive on them unless there is a clear showing that the admission was entered through palpable mistake . (Heirs of Conahap v. Heirs of Regana, 458 SCRA 741)

The ANSWER WITH COUNTERCLAIM of Defendants also admits existence of the questioned MOA. (See par. 3 of Answer)

Defendants recognize that plaintiff has their own records and even suggested that plaintiff and defendants records be referred to, as in fact they were initially referred to, court-appointed commissioners.

As seen clearly in paragraphs 4, 5, 6, and 7 of Defendants Pretrial brief, they admit that Plaintiff kept their own records of their transaction. Plaintiff has summarized or accounted for the total deliveries (par. 5), and plaintiff faithfully recorded in its accounting journals and books of accounts; and these accounting transactions are reflected in its financial statements submitted to the BIR (par 6).

Under item 4.6 of the Opposition, defendants give an impression that plaintiffs new counsel and previous counsel had differing opinions about the MOA between SUDECOR and

defendant Fe Morales. Plaintiff disagrees with this view and maintains that such MOA was not intended either by previous counsel and current counsel for plaintiff to be part of its Formal Offer of Exhibits. A different MOA (there are 2 of such document in the original complaint) was attached. Under item 4.6a defendant states as reproduced below: If at all, the admission of the defendants was limited t o the fact that there exists in the possession of the plaintiff a document purporting to be a MOA between Plaintiff and Defendants. THERE WAS NO ADMISSION BY THE DEFENDANTS AS REGARDS THE LEGALITY OF THE TERMS AND CONDITIONS OF THE OSTENSIBLE MOA. This should not impress. The said MOA purporting to be an agreement between the two parties takes the form of a notarized legal document and needs a specific denial under oath, otherwise its authenticity, genuineness, and due execution are deemed admitted. In this instance, defendants are saying that they admit there exists a MOA purporting to be an agreement between plaintiff and defendants, but THEY RESERVE AN ADMISSION AS TO THE LEGALITY THEREOF. Surely this is not so, for defendants need to deny under oath the legality of the terms and conditions of such MOA. 1.5 ON THE ISSUE OF THE MOA. The Opposition needlessly discusses their objection to the WRONG MOA attached. Plaintiff agrees and grants that those objections are correct; however, that document is not at issue as that MOA is not the one that was supposed to be attached as evidence. Defendants argue under item 4.3 of the Opposition that there are no facts and circumstances that would logically validate plaintiffs conclusion that there was an error in attaching the MOA. A question may be asked: For the purpose as stated To prove that plaintiff and defendant

entered into a MOA relative to the exclusive delivery and sale of scrap metals taken by defendant from SUDECOR in favor of plaintif f., WOULD COUNSEL DELIBERATELY ATTACH A DOCUMENT NOT IN ISSUE AND EXCLUDE THE VERY DOCUMENT WHICH SATISFIES THE PURPOSE OF THE OFFERED EVIDENCE? Plaintiff thinks not. There cannot be a more logical conclusion to be reached. For clarity and reference, the document marked as EXHIBIT C in the complaint is reproduced as follows: [LALAB, PLEASE AWATA IYA GIBUHAT sa no. 4 sa iya PLEADING. I-REPRODUCE ANG MOA unya i-bold and PLAINTIFF ug DEFENDANT] 1.6 Another notable argument in defendants Opposition is that the citation by plaintiff of the case of Armed Forces of the Philippines Mutual Benefit Association v. CA is characterized by defendants as very disturbing since the same does not involve a motion to amend a partys Formal Offer of Exhibits. Perhaps focussi ng too much on details, defendants failed to see the forest for the trees. A careful perusal of plaintiffs Motion reveals that such case, in fact just a one-paragraph quote from the same, was never offered to be a parallel to the current case. A discussion of the case was not presented, but a quote was given in context to plaintiffs discussion of seeking the courts liberality in the beginning of the Motion. The whole quote, as reproduced below, does not even hint at being a case authority parallel to this cases facts and issues:
The general aim of procedural law is to facilitate the application of justice to the rival claims of contending parties, bearing always in mind that procedural rules are created not to hinder or delay but to facilitate and promote the administration of justice. It is far better to dispose of the case on the merits which is a primordial end rather than on a technicality, if it be the case, that may result in injustice. (Armed Forces of the Philippines Mutual Benefit Association, Inc. v. Court of Appeals, G.R. No. 126745, July 26, 1999)

The opposing counsels diligence in reading the cases cited in plaintiffs motion is commendable, yet a declaration that plaintiffs citation of a case quote described as very disturbing gives the impression that plaintiffs counsel is trying to mislead the court with a case cited as an authority that turns out not to be the case. 1.6. Plaintiff agrees with defendants take on the case of Maunlad Savings v. CA, that the facts of the case are different from the present controversy apart from the relief sought and given. Suffice it to say that such case was given as a reference that indeed a partys Formal Offer of Exhibits can be amended and evidence previously identified in testimony can be admitted even though inadvertently excluded from the Formal Offer of Exhibits. 1.7 Defendants insist that plaintiffs new counsel need to assert that her client was

deprived of its day in court by reason of gross, palpable, pervasive, reckless and inexcusable negligence of former counsel. Plaintiffs current counsel humbly refuses. Her Motion is not one for New Trial under Rule 37. She realizes that an emphasis on the adversarial part of litigation is thrust upon a lawyers practice yet she finds both plaintiffs previous counsels and defendants counsel/opposing counsel to be extremely likable lawyers. 1.8 Defendants argue that plaintiffs new counsel is effectively asking for a New Trial

under Rule 37 and then proceeds to extensively discuss the rule, its grounds, and even lists former counsels alleged negligence and asks plaintiffs new counsel to prove negligence of former counsel, short of telling plaintiff to ask for new trial under Rule 37. The Opposition then cites an authority in the form of the case of Padilla-Rumbaua v. Rumbaua (596 SCRA 157) which is a case where a remand and new trial is sought. The case of course, does not fall square with the facts and circumstances of this case. Here, plaintiff is not asking for New

Trial or a remand[DISCUSS GUD ABOUT NEW TRIAL LALAB, I-SEARCH RA SA MGA REVIEWERS NIMO THERE PARA MADUGANG DIRI], there is also no judgment yet, no appeal period to speak of; WE ARE NOT YET PAST THE POINT-OF-NO-RETURN here. Plaintiff is asking the court to exercise its discretion to grant leave for further reception of evidence WHILE IT IS STILL PROCEDURALLY PERMISSIBLE to do so. [ LALAB ADDING TO THIS BUOK. EXAMPLE: The relief sought is not one of new trial but more akin to re-opening of cases. While MNT is filed after judgment is rendered but before finality thereof, a motion to re-open a case is made by the court before judgment is rendered and always in the exercise of sound discretion.] Verily, the motion under consideration is impressed with merit and warrants the courts liberality.

PRAYER WHEREFORE, in view of the foregoing, Plaintiff respectfully prays that its Motion For Leave To Amend Formal Offer of Exhibits With Motion for Continuance be GRANTED. Other reliefs just and equitable are likewise prayed for. Butuan City, Philippines, February 24, 2014.

ASUNTO LAW OFFICE Atty. DAISY RAY ASUNTO, CPA Counsel for Plaintiff CC:

ATTY. CLEMENTINO CALO RABOR CPA